Does Chapter 13 Make Sense for me? 31 Answers as of July 10, 2013

The 1 hour photo I have had for the past twenty years was not profitable for the last 2 years and I was paying out of my own pocket. I finally decided to close it but still have so much debt because of it. The machinery I owned is worth $5k and I also have a home and a car. I don't have a salary anymore, does chapter 13 make more sense than chapter 7?

Chapter 7 may be the route for you depending on how much your house and car are worth and whether money is owed on your house and car. A consultation is necessary for you to properly make the choice between Chapter 7 or 13 so that all of your circumstances are taken into consideration.

Most of my clients that have had a small business failure choose to file chapter 7 instead of chapter 13. But that does not mean that is good advice for you. There is not nearly enough information in your question to be able to advise you. You should sit down with an experienced bankruptcy attorney and review all of your circumstances.

The answer to your questions depends on where you live. If you live within the five boroughs of New York City, or Rockland, Westchester, Putnam, Nassau, Suffolk Counties you can keep your home if you have up to $150K worth of equity in your home. Meaning if the value of your home exceeds what you owe on it by $150k or less you can file Chapter 7. If you are filing jointly with your spouse that amount is double. For the rest of the state the limit is $75k A

Chapter 13 makes sense where you have sufficient income to pay off some of your debts over a 3-5 year period. If you are running a hard negative on your finances, where even if we took away credit card payments, you were still running in the red, then a 13 is not a solution for you. You are probably looking at filing a Chapter 7. If you have equity in your home and car then those may be lost in the Chapter 7. Consult an attorney. Your answer will be based on the value of your property and your income in the last six months.

Does the home have equity? How much? Same question for the car. If no, I would say Chapter 13 makes no sense whatsoever, it's a repayment plan and how do you propose a repayment plan with no salary? Its impossible, and more importantly, why would you want to be on a partial repayment plan if you could discharge everything in its entirety in a Chapter 7?

Any lawyer who answers your question with the little facts you provide is not worth listening to. Go see a local bankruptcy lawyer for a consultation (usually free). A forum like this is for brief information/facts about bankruptcy and an evaluation of a case and advice as to what you should do requires a face-to-face consultation with a lawyer.

There's not enough information to answer that question. If you have too much income for a Chapter 7 case, or assets you cannot fully exempt, then a Chapter 13 may be your best option. The only way to determine is to schedule a consultation with a bankruptcy attorney to go over all the relevant facts.

None of what you posted determines what chapter you may qualify for. As a general rule, the numbers that make a 13 work prevent a 7, and vice versa, so you usually do NOT have a choice of chapters. No one should consider or file bankruptcy without a lawyer, and when there has been a business you have a more complex than average case. To make an initial determination for my clients I look over dozens of pages of detailed financial information. Without your numbers there is no way to answer you.

There are several considerations as to whether chapter 13 or chapter 7 is better. Mostly chapter 13 is used when there is an ongoing business, high income and/or non-exempt assets. Chapter 7 is used when income is low, assets are minimal and where there is no operating business. Consult a bankruptcy attorney for the specific factors in your case.

Regular income that is greater than your monthly expenses is a prerequisite for a Chapter 13. You say that you do not have a salary anymore, and you do not mention having any regular income. Accordingly, a Chapter 7 sounds better for you. Please call me for a free consultation. I will need complete information about your assets, debts, income and expenses to fully diagnose your matter.

The real question is whether you have excess assets you want to keep (if your house has a lot of equity, or if your car is paid off, for example).or if you earn too much to qualify for Ch. 7. Ch. 13 requires that you have regular income. I suspect ch. 7 is better for you. Please feel free to call me if you have questions.

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